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People in Tier-II cities spend twice as much of income on online shopping as Tier-I, finds survey

New Delhi: The wider choices and convenience that e-commerce platforms offer are driving consumers from India’s Tier-II cities to spend more time and money on them. A new market study shows that on average, online shoppers from cities like Coimbatore and Nagpur are spending 2.5 hours per week and 16 percent of their incomes on these platforms. 

In a statement issued Tuesday, market research and advisory firm CyberMedia Research (CMR) said that its survey, titled, ‘CMR Consumer Aspirations and eCommerce in Bharat’ had found that in comparison, consumers in Tier-I cities spent 8 percent of their incomes on online shopping.

“The wide range of choices, convenience, and comfort provided by e-commerce has empowered emerging young consumers in Aspirational India (Tier II, Tier III cities and beyond) to shop more online and to fulfil their aspirations,” CMR said in its statement.

The survey, according to the statement, was conducted in May 2023 and covered 3,006 randomly chosen consumers across Delhi, Mumbai, Bengaluru, Bhubaneswar, Nagpur, Coimbatore, Lucknow and Guwahati. It took into account respondents’ shopping trends over the preceding six months.

The average amount consumers in Tier-II cities spent online was almost on par with the figure for Tier-I, according to the survey.   

“Average spend on online purchase in the last six months by Tier-II buyers (Rs  20,100) is nearly on par with the online spend by Tier I buyers (Rs 21,700). Average spend is the highest in Mumbai (Rs 24,200). Nagpur and Coimbatore also show similar growth trends in online shopping (Rs 21,600),” CMR’s statement said.

The survey also found that among Tier-I cities, consumers in Bengaluru spent the most time shopping online at an average of four hours and two minutes per week.

It also noted the competitive nature of the e-commerce sector. In addition to major players like Amazon and Flipkart, niche market players such as Meesho and and conglomerates like Tata and Reliance all have their market bases.  

Despite this, “our research emphasises that Amazon, with its extensive and enduring presence across India, has the consumer trust and is their preferred choice,” CMR said, adding that despite the sample size of the survey, “there is 99 percent confidence that the results have a statistical precision of plus or minus 3 percent of what they would be if the entire population had been surveyed”.

Also Read: ‘Could be a game changer’ — Amazon India wants trade policy tweak to ease exports via e-commerce

Consumer trends — clothes over electronics  

According to the survey, the top three reasons for online shopping are attractive prices (57 percent), convenient return-and-exchange processes (57 percent) and irresistible offers (49 percent).

Gen Z (51 percent) shops online more frequently than Millennials (47 percent), and two out of three consumers have spent up to Rs 20,000 on online shopping in the past six months, the survey said.

According to the US-based Pew Research Center, Gen Z consists of people born between 1997 and 2012, while Millennials are those born between 1981 and 1996.

Clothing and accessories are the most popular choice when it comes to online shopping, with 62 percent of those surveyed having purchased them as compared to 54 percent for electronics and electronic gadgets. Nagpur, however, bucked this trend, with 81 percent saying they had purchased electronics and electronic gadgets online in the six months preceding the survey. 

The survey also found that 86 percent of shoppers relied on reviews by influencers or in news publications to make their purchase decisions — men, it appears, are more likely to follow such influencers more diligently (90 percent) than women (80 percent).

Sales of 5G, premium phones gaining traction

Among smartphone purchases, 5G phones are gaining more traction online. According to the survey, 57 percent of consumers felt that 5G compatibility was “highly important” for their next smartphone purchase.

 “An overwhelming 62 percent of Tier II buyers are prioritising 5G-capable smartphones,” it said. 

Additionally, the survey found that smartphone premiumisation is gaining ground — 24 percent of respondents said they had bought premium smartphones (i.e. smartphones that cost over Rs 20,000) online, while only 2 percent had bought affordable smartphones (less than Rs 7,000) in the six months preceding the survey.

(Edited by Uttara Ramaswamy)

Also Read: Next big thing in food delivery or ‘over-hyped’? All about Modi govt’s ONDC e-commerce initiative

Source: The Print

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